Excess Social Security Tax Refund

Forum|Forum|6 years ago
April 11, 2020
2 replies
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I completed my taxes and filed. I had two employers during the year and paid excess social security tax. I also had a federal tax excess paid in my return. When I received my federal return, it was only for the excess federal tax and not for the excess social security tax, although this amount was include in my TurboTax summary of taxes. Do I submit to get this excess social security tax differently, will it come to me separately, please advise? The prior discussions seem to suggest this was done automatically by TurboTax.

RobertG

Level 12

If you look at your Form 1040, Schedule 3, you will see excess Social Security withheld on line 11.

This number flows through to your Form 1040 Line 13b, where it is treated as a tax payment.

Your refund includes your excess Social Security withheld.

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TaxOverpayment

Level 2

Turbo Tax Online is not doing the actual calculation for excess social security tax payment. The software makes the comment that you "may have overpaid" but it never confirms or calculates the amount. Additionally, the excess amount is not showing up on Schedule 3, line 11 nor is it showing up on Form 1040, line 18d. There have been discussion in the community space, but the problem still exists today. What does TurboTax recommend.

BillM223

Level 15

@TaxOverpayment

"Turbo Tax Online is not doing the actual calculation for excess social security tax payment."

This is not correct.

TurboTax will calculate the excess Social Security tax withheld and add it to Schedule 3, when the IRS allows it.

The issue that has come up this year is that the taxpayer submitted multiple W-2s with the same EIN on them. This can be the result of a taxpayer working for a PEO,

Normally, a PEO (Professional Employer Organization) handles the personnel as their own employees. Since that is the case, the IRS (correctly) considers that you have only one employer - your PEO.

In this case, the IRS will not accept the request to refund the excess SS tax through your tax return, and neither will TurboTax. In the past, the IRS has sent letters to taxpayers who claimed the refund of excess Social Security taxes on their return when the "two" employers had the same EIN; these letters told the taxpayers to go back to their employer(s) and get the refund from them.

The same thing happens when a company changes divisions internally and moves an employee from one to the other. If both divisions have the same EIN, then the IRS policy is that since this is really one employer, you must ask the employer for the refund.

This a change from prior years where TurboTax had a workaround for this second situation, but that workaround has been removed, based on IRS guidance.

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TaxOverpayment

Level 2

I have 3 different EIN numbers for three W-2s. They are all assigned to me within Turbo Tax and not my spouse. I paid an excess of over $2000 in social security tax and it is not showing up on any of the forms in the places that you and I have both identified it should be. Please let me know if I should look somewhere else within turbo tax. I have even gone as far as looking at the Smart Worksheets where Turbotax shows you the calculations and background info and I am not seeing anything there either.

If the calculation is being done, but the numbers is not showing in Schedule 3, please let me know another place to look. I've seen others say they've experienced this same issue. Has Turbo Tax made an update the to the online tool to ensure that the numbers are showing in the correct forms? Are you able to run a mock situation on Turbotax with either 2 or 3 EINs and see if the numbers show up for you?